A day treatment program is an important component on the continuum of care for young people with moderate to severe mental health issues. The aim of this research was to investigate whether adolescents who participate in a structured day treatment program demonstrate greater mental health gains than adolescents receiving less intensive outpatient treatment. In addition, the research investigated whether mental health gains were related to intake diagnosis and whether parents reported higher levels of mental health gain than the client in their self-report ratings. The setting for the research was The Cottage, an adolescent day treatment program, run by the Child and Adolescent Mental Health Service (CAMHS) in the Australian Capital Territory. The program provides intense multi-faceted treatment within a therapeutic milieu environment for clients aged 12-18 years with moderate to severe mental health issues. The study involved a Day Program group of 22 clients from The Cottage and included a comparison group of 20 outpatient clients from CAMHS. Results indicated that individuals in both treatment approaches had statistically significant reductions in anxiety and depression symptomology and improvements in outcome measures, but there were no significant differences between the two treatment groups. The data indicated a statistically significant difference in return to school rates, whereby approximately 82% of individuals in the day treatment program had returned to school/employment, whilst only 30% of individuals in outpatient treatment had returned to school/employment within three months post treatment. The results did not demonstrate that the degree of mental health gain was dependent upon intake diagnosis and although not statistically significant, parents rated their children as more severe in terms of psychopathology than the client.